Wis. high court maintains limits on awards to third parties

Justices say $200,000 awarded to a father for emotional distress after his son's death is not allowed under state's medical liability laws.

By Tanya Albert Henry — Posted Aug. 10, 2009

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Wisconsin physicians support a recent state Supreme Court decision they say will help keep medical liability premiums affordable and allow them to provide care to patients.

The Wisconsin Supreme Court in July ruled in Phelps v. Physicians Insurance Co. of Wisconsin Inc. that very limited circumstances allow a bystander to file a claim for negligent infliction of emotional distress in a medical liability lawsuit. Justices said the law does not allow the plaintiff in the case, Gregory Phelps, to collect damages for emotional distress in a lawsuit he filed against a first-year medical resident after one of the twins his wife was carrying died by asphyxia due to umbilical cord entrapment and placental abruption.

"The ruling is very good for patients. Right now, we are told by our liability insurance companies that patients can't videotape births because of liability. Had the court allowed bystander claims, [insurers] may not have allowed significant others in the delivery room," said Robert Jaeger, MD, an ob-gyn and president of the Wisconsin Medical Society. He also sits on the board of the state's Injured Patients and Families Compensation Fund.

In addition, the court ruled that unlicensed first-year residents (residents in Wisconsin aren't licensed until their second year) are borrowed employees covered by the state's medical liability laws. "The ruling leaves the hospital responsible to adequately supervise and to protect that resident," said Michael B. Van Sicklen, a Madison, Wis., attorney for the insurer and resident in the case.

If the court had ruled the other way, hospitals would have had to buy separate insurance policies for first-year residents. Among other things, those residents also would have been subject to unlimited noneconomic damages in medical liability lawsuits, instead of having the damages capped under the state's law.

It would have been cost prohibitive, and first-year residents in Wisconsin likely would have been paid less than their counterparts in other states, making it more difficult to recruit to the state, Dr. Jaeger said. That would have been a significant blow in trying to ensure that the state had enough physicians to meet patient needs, because residents often stay and practice where they complete their training.

The Wisconsin Medical Society and the American Medical Association filed a friend-of-the-court brief, which argued that expanding limitations on bystander claims would have undermined Wisconsin's health care delivery system. The brief also stressed the importance of protecting first-year residents with state laws.

"The decision will help foster high-quality, accessible and affordable health care for Wisconsin patients," said Cyril M. Hetsko, member of the AMA Board of Trustees and a Madison, Wis., internist.

$200,000 award overturned

Gregory and Marlene Phelps filed the bystander claim, among others, after a series of events led to the death of one their twins. This most recent Supreme Court ruling concludes more than eight years of litigation, including an earlier high court ruling on another issue in the case.

Marlene Phelps was admitted to St. Joseph's Hospital in Milwaukee in October 1998 for bed rest. On Nov. 24, constant suprapubic pain awoke her, according to court documents. Between 2:40 a.m. and 6 a.m., on-call first-year resident Matthew Lindemann, MD, examined her and ordered a number of tests. Fetal heart monitoring showed that the twins' heart rates were normal.

At 7 a.m., while sitting on the commode, Mrs. Phelps felt toes extending from her. Her husband rushed to the nurses' desk and found another doctor, who delivered Adam Phelps at 7:20 a.m. The baby was rushed to the neonatal intensive care unit, but later pronounced dead. The second twin, Kyle, was delivered at 7:43 a.m.

In a bench trial, the judge awarded the Phelpses $990,000: $500,000 total to Gregory and Marlene for Adam's wrongful death; $200,000 each to Gregory and Marlene for emotional distress; and $45,000 each to Kyle and an older sibling for the loss of society and companionship.

Dr. Lindemann appealed the $200,000 emotional distress award to Gregory. Because the court found 5-2 that first-year residents are covered by Wisconsin's tort reform laws, it concluded that Gregory was not entitled to the award under those laws and ordered it to be tossed out.

The court acknowledged that there are circumstances where a bystander claim can be allowed in medical malpractice lawsuits. In an earlier high court opinion in a different case, justices concluded that a mother in childbirth, such as Marlene, experiences emotional distress damages in a manner different from a third-person who merely witnesses the childbirth, such as Gregory.

Two judges dissented from the decision that Phelps wasn't entitled to the emotional distress award, saying that the "hallmark of negligent infliction of emotional distress is a contemporaneous or nearly contemporaneous sensory perception of a sudden traumatic, injury-producing event." The justices said Gregory Phelps' experience fell under that definition.

"Phelps witnessed the spontaneous delivery of Adam. He witnessed the injuries and death of his son," the dissent said.

An attorney for the Phelps family and representatives of the Wisconsin Assn. for Justice, which represents trial lawyers, did not return phone calls.

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Case at a glance

Can a third party file a claim for negligent infliction of emotional distress in a medical malpractice lawsuit?

The Wisconsin Supreme Court said no, except for very limited circumstances.

Impact: Physicians in Wisconsin say the conclusion is good for physicians and patients because it will help keep liability insurance premiums affordable and help keep doctors in the state to provide care. Trial lawyers say the ruling is unfair to patients because it eliminates a class of claims in the area of medical malpractice.

Source: Phelps v. Physicians Insurance Co. of Wisconsin Inc., Wisconsin Supreme Court

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